If this short bio is interesting, you may enjoy the much more in-depth biography, _Titan_, by Ron Chernow.
In addition to an incredibly thorough (and even-handed, IMO) treatment of Rockefeller, I found it an interesting perspective on the post-war period in the US.
Rockefeller was relentless in ferreting out ways to cut costs. During an inspection tour of a Standard Oil plant in New York City, for instance, he observed a machine that soldered the lids on five-gallon cans of kerosene destined for export. Upon learning that each lid was sealed with 40 drops of solder, he asked, "Have you ever tried 38?" It turned out that when 38 drops were applied, a small percentage of the cans leaked. None leaked with 39, though. "'That one drop of solder', said Rockefeller,...'saved $2,500 the first year; but the export business kept on increasing after that and doubled, quadrupled--became immensely greater than it was then; and the saving has gone steadily along, one drop on each can, and has amounted since to many hundreds of thousands of dollars"' (Chernow 1998, pp. 180-81). Over the course of his career at the helm of Standard Oil, "Rockefeller cut the unit costs of refined oil almost in half" (Ibid., p. 150).
"Rockefeller was relentless in ferreting out ways to cut costs. During an inspection tour of a Standard Oil plant in New York City, for instance, he observed a machine that soldered the lids on five-gallon cans of kerosene destined for export. Upon learning that each lid was sealed with 40 drops of solder, he asked, "Have you ever tried 38?" It turned out that when 38 drops were applied, a small percentage of the cans leaked. None leaked with 39, though. "'That one drop of solder', said Rockefeller,...'saved $2,500 the first year; but the export business kept on increasing after that and doubled, quadrupled--became immensely greater than it was then; and the saving has gone steadily along, one drop on each can, and has amounted since to many hundreds of thousands of dollars"' (Chernow 1998, pp. 180-81). Over the course of his career at the helm of Standard Oil, "Rockefeller cut the unit costs of refined oil almost in half" (Ibid., p. 150).
Another similar thing that stuck out to me was how he held up his books. They were meticulous and he prided himself of them. I remember reading the joy he had of learning double entry book keeping.
The man loved money. He loved keeping track of it down to the last detail. He even used to chant "one day I will be rich, rich, rich"!
Very interesting man. Given his character and the conditions he was in, it wasn't at all surprising he amassed so much wealth.
I'll second that book. It's an excellent read, covering his rise from almost nothing to oil monopolist, and everything in-between (eg there are fascinating parts in there about Standard Oil's collision with the first Russian oil gushers, which significantly threatened Standard's international expansion).
What's amusing about the book is Chernow would sum up each chapter with the popular narrative of how awful Rockefeller was, yet the facts presented in that chapter told another story.
That book was invalualable for exactly those two reasons: the evenhanded portrait of a very complex individual, and a detailed portrait of the world in which he lived and knew. That book started me on a long tear of other biographies of large individuals in American history, specifically from Reconstruction through the Vietnam War. I'm currently working through Robert Caro's multipart series on Lyndon Johnson, another awesome biographer.
They were incredible, especially the first book, The Path to Power. It's a fascinating story of a man from humble beginnings who just wouldn't quit and had an unrelenting desire to be somebody powerful.
Follow that up with Private Empire: ExxonMobil and American Power by Steve Coll and you've got a fascinating and compelling look at the last ~120 years of oil and American history.
I wonder, who in our day is Rockefeller - as it would seem that it might be musk but without being an asshole.
Zuck is just a manipulator and as he is so young, I don't expect his actually legacy to take hold for at least 40 years. But musk is much more a Titan than zuck. Zuck isn't really doing anything outside his comfort zone - but that doesn't mean that oculus won't be a thing in 20 years - but I wouldn't credit that to zuck.
Bezos - hands down, similar degree of ruthlessness in controlling all markets he touches. An anecdote from the "The Everything Store" which sheds more light below:
“Bezos kept pushing for more. He asked Blake to exact better terms from the smallest publishers, who would go out of business if it weren't for the steady sales of their back catalogs on Amazon. Within the books group, the resulting program was dubbed the Gazelle Project because Bezos suggested to Blake in a meeting that Amazon should approach these small publishers the way a cheetah would pursue a sickly gazelle.
As part of the Gazelle Project, Blake's group categorized publishers in terms of their dependency n Amazon and then opened negotiations with the most vulnerable companies. Three book buyers at the time recall this effort. Blake herself said that Bezos meant the cheetah-and-gazelle analogy as a joke and it was carried too far. Yet the program clearly represented something real--an emerging realpolitik approach toward book publishers, an attitude whose ruthlessness startled even some Amazon employees. Soon after the Gazelle Project began, Amazon's lawyers heard about the name and insisted it be changed to the less incendiary Small Publisher Negotiation Program.”
― Brad Stone, The Everything Store: Jeff Bezos and the Age of Amazon
There's also the natural, if a bit disturbing, business tactic of examining which products sell best on Amazon and then leveraging economy of scale to produce their own copies (Amazon Basics).
Although Apple is also famous for ruthless negotiation with publishers, they're proud enough that an Apple copy (e.g. the U-turn on styluses) will rarely be cheaper than what they've taken inspiration from.
Bill Gates probably already took that title. He'll have generated a likely $150 billion in total wealth by the time he's done (stands at around $115 billion now; $87 billion per Bloomberg's rankings plus around $30b+ given to the foundation so far). He built a monopoly at the core of the most lucrative boom industry of his day (computing and software). Similar reputations, similar drive and ambition, similar behaviors under anti-trust questioning, similar response to give his wealth away after stepping away from the business, and so on. Interestingly however, Gates was far more prone at emotional outbursts and getting upset, Rockefeller was extremely contained by comparison.
As someone else noted, Bezos might follow along with Gates, but it appears Bezos is more like Sam Walton than a Rockefeller. Walmart sprawled into numerous other categories, attempting to perpetually find new ways to make money at the edges of its empire; Walmart is a hyper low margin business, built on low prices and high efficiency; both Sam Walton and Bezos retained very large stakes in their businesses despite the size; both kept fundamental control. Amazon has no serious monopoly category however, and they have a comparatively weak cash generation capability (AWS is spitting off some nice operating income, but it pales in comparison to the very high margin cash spigot that Windows was).
Hands down it would be Peter Thiel. After I read that book I heard so much of Rockefeller in his worldview, I really thought it was uncanny. Specifically, Thiel's view on monopolies had some hints of Rockefeller.
"To this day, there is little evidence on the University of Chicago campus that it has anything to do with Rockefeller." ...except may be for the campus centerpiece known as the Rockefeller Chapel where all the school ceremonies take place? (depicted in the photo right above the quoted sentence) https://en.wikipedia.org/wiki/Rockefeller_Chapel
Rockefeller Chapel what with the tower that taller than any other structure on campus? Supposedly there is even a university mandate which forbids anything taller to ever be built on campus.
Also, how about the commons area in the student center- i.e Hutchinson Commons in the Reynolds Club. As you walk in, along the sides on the walls are portraits of the university's presidents. But dead center on the wall for all who enter to see is a much larger portrait of JDR- with his name and title "Founder". The man whom the commons and outside court is named after and who can accurately be described as the soul of the University of Chicago- Robert Maynard Hutchins- has his portrait regaled off to the side of the JDR centerpiece. lol @ "little evidence of philanthropy."
I kept thinking of Bill Gates while reading this, and not just because both of them turned to philanthropy after building their empires. The only reason Bill Gates is not richer than Rockefeller is because of the anti-monopoly legislation that was invented to stop Rockefeller. Without the antitrust lawsuit Microsoft would have been able to kill off Apple and Netscape in the 90s and kept the web bottled up within Internet Explorer in the 00s.
> Without the antitrust lawsuit Microsoft would have been able to kill off Apple and Netscape in the 90s and kept the web bottled up within Internet Explorer in the 00s.
I used Netscape in the 90s. It was a crummy product that crashed if you looked at it. IE was much more stable. IE was better, much better. Opera was also available, but there wasn't much to recommend it.
As for Apple in the 90s, Apple nearly destroyed itself all by itself. Check any of the innumerable books on the history of Apple.
Netscape was best until about version 3. It had some niceties that IE lacked, actually IE was not even acceptable. Netscape 4.7 was "not so nice" and IE 4 was faster so, although terribly unsafe, it dominated market for years.
Oh, and by the time Netscape 4.7 and IE 4.01 were released, Microsoft had already destroyed Netscape's business.
I don't remember which Netscape I used, but I started with it. It was awful in the constant crashing. I tried IE, and it crashed too, but only about half as often. If Netscape crashed half as often as Netscape, I would have stuck with it.
If you produce an obviously inferior product, it's a bit unfair to blame the competition for your own failures.
Actually, no. That's not true at all. Crashes were as rare as today if you chose the right programs and were properly conservative with what you installed. I suffered very few crashes even with Windows 3. I won't say Windows 95 was rock solid, but I didn't see the infamous BSoD more than a couple of times a year... and I was a heavy user!!
Do you know what was different? A lot of people had very poor judgement about what to install and what to trust. Also faulty drivers, but this still happens today! No further than last night this very computer reset when starting Firefox :-/
I'm very surprised to see this revisionist version of computer history. I can't help thinking that there's some vested interest in this criticism. At the time it was some sort of fad among Linux fans against Windows dominance. I also liked Linux, but it was very annoying to see this kind of (reverse!) FUD.
Now it seems like it's some other "interest group" that's spreading it. Depressing.
The FoF makes no mention of software quality issues that I could find. Nor did they prevent anyone from installing Netscape. Nor did they prevent Netscape from making a better browser than IE.
Microsoft's actions in bundling a browser and attacking Netscapes various (likely poor) business models in multiple modes had a great deal to do with why and how Netscape started turning out shitty products.
This was part of Microsoft's strategy from the very beginning. Look up Andrew Orlowski's story "The Canonization of Saint Bill", in which a former Intel executive recalls an early 1980s meeting with Gates and Ballmer explicitly offering to carve up the IT market in a three-way split between IBM, Intel, and Microsoft.
I was in the industry from the late 1980s onward, and saw what and how Microsoft operated. Testimony and findings of fact from the DoJ case, the Novell case, the SCO vs. IBM case, and others, all paint the same story.
And yes, some of the competitors exhibited incompetence or limited vision. But "DOS ain't done until Lotus won't run", and similar variants, are very much part of the history:
The strategic side is: ... We put a bullet in the head of our would be competitors on DOS like DRI, Desqview, dos extenders etc.
- Nathan Mhyrvold, Microsoft Corp., May 9, 1989. Business as usual.
Bullet in the head of dos extenders? Zortech (my company) created its own 32 bit dos extender and shipped it. It worked fine up through Windows XP, and was a major factor in the success of Zortech C++. I also used 286 dos extenders extensively, the only "bullet in the head" they ever got was being obsoleted by advancing 32 bit computing.
Are you in any way refuting the fact that this is what the legal record records Microsoft executives as having said? In many ways? Against many specific competing or even complementary products?
You're quite adept at dragging goalposts, but the point remains they've moved, and you're not defending the original point. I'll interpret that as your having conceded it.
Yeah, I read your link about Microsoft v Novell, which is not the same as Microsoft v Netscape.
As for Microsoft warning people that Windows was not tested with DRDOS - so what? Why would they be obliged to test against DRDOS? Why would they be obliged to support Windows on DRDOS?
I remember in even earlier days PC clone BIOSes would contain the string: "some programs expect the string 'Copyright IBM' here". IBM was unable to stop the clones. Microsoft could not stop DRDOS from faking whatever detection mechanism their was, why didn't DRDOS do that? Why didn't DRDOS offer better deals to OEMs? Why didn't DRDOS offer their own Windows? Why didn't DRDOS offer a dos that was much better, rather than only slightly better?
And the "bullet in the head of dos extenders" was simply puffery, as I was directly involved in the dos extender business and no such thing happened. My dos extender made DOS into a viable 32 bit operating system - why didn't DRDOS come knocking and buy that? Microsoft had nothing like it.
In my not-so-humble opinion, DRDOS had many opportunities to counter, and they didn't. Microsoft didn't owe them any consideration. What Microsoft execs said isn't any more material than rah-rah locker room talk amongst a football team about them murdering the other team.
I preferred 3.0.3 SE. The standard editions seemed more stable and faster than the gold editions, and I really didn't need the extra functionality. Unfortunately with the 4.0 series everything was folded into the Communicator suite.
One big problem a lot of people forget is how quickly the web was moving back then. 3.0 came out in mid-1996, and soon there were many sites that wouldn't work with 2.0. 4.0 came out in mid-1997 (technically before 3.0.3), and by late 1998 I had to upgrade to the 4.0 series, because a lot of the web didn't work in 3.0.
It was actually DoubleClick that made me switch to IE - they started serving Javascript that hung every version of Netscape, which broke a lot of the web.
I wrote and sold applications on Windows for decades. I never asked for nor received permission from Microsoft to do that, and neither did any other vender I've ever heard of. Windows was never a "walled garden".
It's still amazing to me how huge iPods were about ~10 years ago, considering that they are basically museum pieces now. They gave Apple credibility with people outside of 90s Apple fan(atics). The ads with silhouettes of people dancing were Apple's best in my memory.
Until Microsoft stopped keeping up with everyone else. You're reinforcing his point, Microsoft would have put everyone else out of business had it not been for antitrust issues. Competition is vital even when it's sub-par because it won't always be.
> Microsoft would have put everyone else out of business
Nobody knows what might have happened. The point is, it didn't happen and never did. And today Microsoft finds it very difficult to compete in the phone, search, and cloud market, and none of that difficulty is due to the Justice Dept's actions.
Every device I buy comes bundled with a free browser, along with a long laundry list of other bundled utilities. The idea that a browser is somehow special doesn't stand up, and special if it comes with Windows even less so. Linux also comes with tons of free software that is hard to compete with.
I know for a fact that Netscape was an inferior product to IE. I downloaded IE and uninstalled Netscape. I made an extra effort to not use Netscape anymore, because it was nearly unusable due to crashing. Maybe if Netscape had a better product, I'd be sympathetic.
It's not a conspiracy if an inferior product fails in the marketplace. Happens all the time.
The quality of Netscape's product is not relevant. It is only relevant that Microsoft used anti-competitive practices to try and put them out of business. As you can't seem to tell the difference, there is little point in conversing.
Of course it is relevant. It is perfectly adequate to explain the demise of Netscape. Microsoft didn't make Netscape crash, Netscape did.
Ironically, I use Chrome now because IE crashes constantly when accessing github.com.
I presume you mean the "anti-competitive practice" of including it with Windows. Windows is full of utilities that come with it, ditto with every other operating system before or since. Why is a browser special? Why are other companies entitled to not have competition from Microsoft? What do you make of Linux coming bundled with huge swaths of quality free software?
"Although Standard Oil was eventually forced to break into multiple companies because it was ruled a monopoly, BP, Exxon, ConocoPhillips and Chevron (among others) are all subsidiaries of Standard Oil."
This is not accurate. BP stands for British Petroleum and has never been part of Standard Oil. BP has bought a couple of companies that used to be part of Standard Oil.
"To crush his competitors, Rockefeller would create a shortage of the railroad tank cars that transported oil. He’d then buy up all the barrels on the market so his competitors would have no place to store or ship their oil. He bought up all the available chemicals that were necessary to refine oil."
i thought it's common strategy played in AOE....
this post makes a great companion with another recent post about Uber on Lyft.
What do you think people in 1885 would think of the internet, where you can read some random grade school student's term paper without even leaving your desk?
I don't think it's far fetched for someone in the late 19th century to imagine an automated, in-home telegraph system that printed out content for someone to read. Someone might have even had their university assignments sent over telegraph in an emergency. I believe Western Union used to deliver telegrams (via telegraph) on demand for customers.
Stock updates were also sent automatically over telegraph starting in the 1870s for anyone that owned a ticker tape machine[1]. There were also teleprinters that sent news stories and other information to those that owned them.
Fax machines were also invented in the mid 19th Century and allowed for the transmission of signatures and drawings over telegraph[2].
The basics for an asynchronous, global communication system have been around since the 1800s, just not as cheap and user friendly as what we enjoy today.
In that one photo he looks, literally, like Lord Voldemort. That can't have helped his PR at all since I'm fairly sure newspapers were able to print photos by this point.
"Coming on the eve of the muckraking era, Rockefeller’s alopecia had a devastating effect on his image: It made him look like a hairless ogre, stripped of all youth, warmth, and attractiveness, and this played powerfully on people’s imaginations. For a time, he wore a black skullcap, giving him the impressively gaunt physiognomy of a Renaissance prelate. One French writer wrote that “under his silk skull-cap he seems like an old monk of the inquisition such as one sees in the Spanish picture galleries.” 46"
It's shocking that they present this story as a tale of virtue. If being an entrepreneur is a noble calling, then we should be ashamed of Rockerfeller for his ruthless tactics, not praising him for it. If we want to praise capitalists and capitalism, then we should be villifying Rockerfeller for his monopolistic tactics. He was too clever by half as a CEO, since his tactics eventually brought down the ire of the government. And he felt the need to atone for his horrific business practices by charity, assuming that one of them would cancel out the other. He deserves to have the ruthless, terrible reputation the article laments him having.
I recommend that you read "Titan" by Chernow. Rockefeller is mostly guilty simply of being very rich. During his career, he caused the price of kerosene to drop 70%, and stay down. This was good for the expanding country.
During the anti-trust trial, Rockefeller was steadily losing market share to nimbler, aggressive competitors. There was no need for the government to break it up, it was coming apart anyway.
All businesses rise and fall over time. The popular narrative that, unchecked by government, a business will eventually rise to absorb everything is not borne out by practice.
> All businesses rise and fall over time. The popular narrative that, unchecked by government, a business will eventually rise to absorb everything is not borne out by practice.
Interesting assertion, do you have any books/data to back that up?
The entire history of economics backs this up. The only instances of long-lasting monopolies are the result of government coercion. The instability of large, profitable businesses has both a solid theoretical foundation and an unending abundance of empirical data.
If you ever think you have found a single instance of monopoly lasting any significant length of time, look deeper - with absolute certainty there is a government gun backing it up.
"If you ever think you have found a single instance of monopoly lasting any significant length of time, look deeper - with absolute certainty there is a government gun backing it up."
But that caveat lets the horse out of the barn, since the gains made by monopolies can purchase lobbyists and thence the government gun. Disney Studios has been around 93 years at this point.
What, precisely, does Disney have a monopoly on? Last I checked there were at least several major movie studios, TV stations, and animation houses doing very well for themselves independently of the mouse.
Intellectual property is considered a monopoly assigned by the government.
My example aside, is it really so hard to believe that successful companies can influence regulation? Monopolies are exceptionally successful companies.
Irrelevant since it's a straw-man. It doesn't matter if monopolies self destruct over enough time, the point of regulation is to avoid them to begin with because they're not good for capitalism.
It does matter. Monopolies are not "good for capitalism" if they prevent honest competition from battling the monopoly for business. If, as argued above, monopolies naturally "self-destruct" in favor of newer, more ferocious competitors, then regulation isn't necessary.
> If, as argued above, monopolies naturally "self-destruct" in favor of newer, more ferocious competitors, then regulation isn't necessary.
Absolutely incorrect as it allows for the abusive monopoly to exist for an undetermined amount of time possibly preventing competition more than long enough to do harm. This argument is equivalent to saying all murders die eventually so there's no need to outlaw murder.
Just because something self destructs "eventually" is not sufficient reason to not regulate it and is certainly not a good argument against regulation.
edit replying to below:
> I'm curious what harm you accuse SO of. Keep in mind that SO dropped the price of kerosene by 70% and kept it down.
reply
Why should I keep that in mind? Doing a good thing doesn't mean you didn't also do bad things so that's simply not a relevant fact in this discussion.
It is historical fact he used anti-competitive practices[1] to sabotage the competition, the harm caused was to those trying to compete with him and it's exactly the reason we now have anti-trust laws.
All businesses rise and fall over time. The popular narrative that, unchecked by government, a business will eventually rise to absorb everything is not borne out by practice.
Businesses do rise for a period of decades, however, and can do a lot of damage along the way should they decide to leverage monopoly or otherwise kill competitors unfairly.
> The popular narrative that, unchecked by government, a business will eventually rise to absorb everything is not borne out by practice.
There is no such popular narrative-that's merely a strawman you've created-the popular narrative is that monopolies can and do form (not always, but can) in the absence of government rules to prevent them and that such monopolies are bad for capitalism. That is a fact borne out by history.
> Rockefeller is mostly guilty simply of being very rich
No, he's guilty of abusing the power of his near monopoly to sabotage competition just as the OP said. He's not reviled for his wealth, but for the unethical ways in which it was maintained.
> The popular narrative that, unchecked by government, a business will eventually rise to absorb everything is not borne out by practice.
I get your point, but there are exceptions. In particular, utilities come to mind. All locations I've lived except 1 provided exactly one option for high-speed internet. I don't see that changing in most parts of the US any time soon. Ditto for water and electricity, depending on locality. Even temporary monopoly abuse in either of those two sectors can have devastating humanitarian impacts.
Aren't most utilities gov't supported monopolies? I think the logic is that for some utilities it doesn't make economic sense to have 5 companies all providing water to a house (5 water lines underground?).
The gov't gives the utility a monopoly in exchange for full coverage to all customers and pricing oversight.
There are plenty of examples where private companies control water distribution without government assistance or oversight if you look past the USA. We don't need fanciful theoretical speculation to know what happens in practice.
(note: not continuing with this thread because holy fuck hivemind downvotes.)
In addition to the other comments, I would also note that it's untrue that Rockefeller started doing philanthropic work as "atonement" for his business practices. Even as a young man just getting his start as a bookkeeper at a small merchant, he gave a significant portion of his then-meager pay to charity.
He was a complicated man, no doubt, and he tended to gloss over some of the consequences of his actions when recalling his past, but he was, mostly, just vilified for being a brilliant businessman at a time when it was popular to do so.
I imagine this complexity comes from his combination of economic and religious values. Interestingly, it was not uncommon for Protestants to have this kind of dilemma - they were encouraged to work very hard (see "The Protestant Work Ethic") for having success in life was the only indication that one was in god's favour. However, it was forbidden to actually spend one's earnings on selfish pursuits thus many Protestant businessmen reinvested the money into their enterprises which only increased their earning power.
On top of that, his father was a philandering, alcoholic, gambling bigamist that left he and his mother when he was quite young. He strove all his life to not be "that guy".
All of us raised in a capitalist society abide by this social contract, and as such it is more beneficial to have examples of people that played by more effective sets of rules than the next person.
People have learned from this by having a settlement (or rainy day fund) specifically for the government.
You can use it as educational, as a cautionary tale, but there isn't need to pass any retroactive judgment on it, in my opinion. No need to either rosy it up, or highlight something you would rather consider abominable.
The history channel show (men who built america), the book, a few podcasts with the book's author, and a few clips from youtube from the history channel and biography channel.
In addition to an incredibly thorough (and even-handed, IMO) treatment of Rockefeller, I found it an interesting perspective on the post-war period in the US.